Everyone is ready for the U.S. election to be over. The question is: Will business travel rebound once we move into a new year with a new president, or will global factors keep travel on a slow-growth trajectory?
Business travel in the United States can’t seem to shake the drag of an ugly election season and international upheaval.
United States business travel volume is expected to grow just 1 percent in 2016 compared to the previous year, according to a new forecast from the Global Business Travel Association‘s education and research arm. Spending is projected to drop 0.6 percent.
“We’ve been in a period now — a really unprecedented period — of a kind of wait-and-see mode of business travel,” said Michael McCormick, executive director and chief operating office of GBTA.
The association attributed that behavior to the uncertainty surrounding the U.S presidential election, slow global expansion, low inflation, weak investment, and unstable political conditions around the globe.
The outlook, which was released Thursday, was downgraded for the third consecutive quarter.
“That’s unprecedented too,” McCormick said.
This year, total U.S. business travel volume is expected to reach 520.8 million trips, while spending is expected to fall slightly to $282.3 billion. Next year should be better, with spending projected to increase 3.8 percent and volume going up 2.7 percent. Inflation would be a major driver of that higher spending.
According to the study, one of the weakest areas for U.S.-originating business travel is outbound international trips. Volume is expected to grow less than one percent in 2016 and 2017, and spending will be nearly flat at an increase of just 0.1 percent this year, followed by 1.7 percent next year.
China’s slower growth, recession in Brazil and Russia, the impact of the Brexit vote, and political uncertainty in Latin America, and Middle East, and Europe are all factors contributing to the weakness in outbound international travel.
McCormick said companies are still sending business travelers to do what they have to do — maintain relationships and keep operations running. But the type of travel that is focused on growth, expansion, and developing new relationships is being impacted, he said.
“It’s an interesting set of dynamics,” McCormick said. “And the question mark is after the election’s over and as we get into budgeting and next year — after a period where there’s a realization there is no other shoe that’s going to drop — will companies return more to making some of that investment in travel and in growth again rather than kind of staying put?”
Photo credit: Travelers walk to their gates at O'Hare International Airport in Chicago. A new outlook from the Global Business Travel Association says U.S. business travel spending is expected to drop in 2016. Nam Y. Huh / Associated Press